In what shows it is fully confident of winning the tax dispute with telecom major Vodafone, the income-tax department on Tuesday moved the Supreme Court seeking exemption from paying 1% commission being charged by the court registry on withdrawal of Rs 2,500 crore deposited by British firm earlier. Instead, the government said Vodafone should bear the liability on the commission too.

The Director General of International Taxation has sought a direction from the court to Vodafone International Holdings, the world?s biggest mobile-phone company by sales, not to pass on the liability to the department. The amount was deposited by the firm, as part of its alleged tax liability in the 2007 Vodafone-Hutch cross-border deal that created Vodafone-Essar.

Seeking to invoke SC powers to waive the commission, the department in its affidavit submitted that 1% commission amounting to Rs 25 crore was ?a substantive sum and the deduction would cause financial outflow.?

The matter is likely to come up for mentioning on Thursday. Tax expert Mukesh Bhutani of BMR & Associates said that as per SC regulations, the withdrawal from registry attracted an administrative charge of 1%. ?In this case, the debate is who will pay the charge. While Vodafone says that it has already discharged its duties, the department wants the full amount. Now, it is the discretion of the chief justice to waive the amount,? he added.

SC on November 26 allowed Vodafone to deposit Rs 2,500 crore towards tax liability through electronic banking wire transfer and also furnish an additional bank guarantee for Rs 8,500 crore.

As per the apex court?s order of November 26, director-general, International Taxation, had given an undertaking that the department would return the sum of Rs 2,500 crore with interest at the rate that may be fixed by the court at the appropriate time. After deducting the commission, the department is permitted to withdraw Rs 2,475 crore and would have to return a principal amount much higher than what had been withdrawn from the registry if Vodafone succeeded in the matter. ?…the undertaking has been given without prejudice to the right of the department/respondents to seek exemption from paying a commission of 1% which is sought to be deducted from the Rs 2,500 crore by the registry,? the department stated.